Proxy advisory firms have split in their assessments of Tiptree Inc.’s proposed sale of its specialty insurer Fortegra to DB Insurance, setting the stage for a contentious shareholder vote at the company’s Special Meeting on December 3rd.
At the time, the parties said the transaction was subject to approval by Tiptree stockholders, regulatory clearance and other customary closing conditions.
Tiptree has now disclosed that Institutional Shareholder Services Inc. (ISS) has recommended that stockholders vote “FOR” the proposed deal.
In its analysis, ISS stated, “The sales process itself was competitive, and Tiptree explored alternative transaction structures including an IPO, an outright sale of Tiptree, and buying out Warburg Pincus’ stake in Fortegra with no success.
“Ultimately, the competitive dynamic and public disclosure of the sales process support the board’s argument that the offer presented is likely the best available at this time.”
ISS added, “Tiptree has delivered strong TSR over the past five years, outpacing peers and the broader market. In other words, the next steps for the company should be viewed with an understanding of the company’s structure and its long-term track record.”
Michael G. Barnes, Executive Chairman of Tiptree, welcomed the endorsement, saying, “We are pleased that ISS recognises the compelling value of the Fortegra transaction for our stockholders.
“Your Board unanimously recommends that Tiptree stockholders vote “FOR” the Merger Proposal at our December 3rd Special Meeting. Every vote is important, as a failure to vote will have the same effect as a vote against approval of the Merger Proposal.”
However, Veradace Partners L.P., which holds 5.1% of Tiptree’s outstanding common stock, announced that Glass, Lewis & Co. and Egan-Jones Ratings Company have both recommended that shareholders vote against the proposed sale at the 3 December 2025 Special Meeting.
Alex Vezendan, General Partner of Veradace, said, “We appreciate that both Glass Lewis and Egan-Jones conducted independent, comprehensive analyses and concluded that shareholders should oppose the transaction at the upcoming Special Meeting.
“This sale stems from a flawed and rushed process that ignored superior alternatives and appears designed to create a “blank-check” holding company from which management can continue to siphon value from shareholders.
“While we firmly believe that ISS reached an erroneous conclusion based on factual errors, we appreciate that ISS nevertheless also recognised significant issues surrounding the transaction, including the sharp post-announcement share price decline, hundreds of millions of dollars of tax leakage, and that Tiptree management has not provided any plan to return nearly $1 billion in transaction proceeds to shareholders.
“We strongly urge our fellow shareholders to follow Glass Lewis and Egan-Jones’ recommendations and reject this value-destructive transaction.”
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